New Zealand Police Issues Public Alert Against Bitcoin Investment Scam

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New Zealand’s police department has urged the public to be vigilant of online investment schemes offering heightened returns with investments in cryptocurrencies like bitcoin.

Police in the region of Canterbury in New Zealand issued a public alert on the department’s website on Wednesday, reminding residents to be wary of crypto-investment schemes after an incident wherein a victim lost NZD$320,000 (approx. $212,500) to an online scam.

While the police withheld specific details of the scam and its operators, “[t]he scam involved investments in cryptocurrencies, such as bitcoin,” the notice said. To solicit investments from its victims, the company offered lucrative returns in exchange for a small investment.

“The investment grew as more money was deposited, but soon began to decline,” police added. The spiral continued with the scammer contacting the victim on several occasions to obtain more investments that were deposited on the scheme’s website.

“Members of the public should seek advice before making any online investments they are unsure of. Scammers are extremely persistent and can seem very credible, as they are highly versed in their trade. “

The alert also redirected residents to a crypto advisory, by CERT New Zealand, the country’s cybersecurity watchdog. With a quick explainer on the advantages and risks in cryptocurrency investments, the advisory – refreshingly – suggests cryptocurrency adopters to store their coins in offline storage to minimize hacking risks.

As things stand, the cryptocurrency industry is largely unregulated in New Zealand. As reported by CCN in November 2017, the Financial Markets Authority (FMA) – the country’s financial regulator – published its official stance on cryptocurrencies and initial coin offerings (ICOs), deeming them securities.

Within weeks, the FMA had issued an official warning against a teenager’s NZD$220 million cryptocurrency venture that was withdrawn less than a week after its launch.